Law: Income Tax Ordinance, 1979

Section: 62,132,30,108(b)(i),55,ThirdSched

Law: Income Tax Rules, 1982

Section: R.190

(a) Income Tax Ordinance (XXXI of 1979)---Ss.62 & 132---Assessment on production of accounts, evidence etc.--¬Financial expenses---Disallowance of such expenses after due confrontation under S.62 of the Income Tax Ordinance, 1979---Setting aside of the same by the First Appellate Authority--Validity---No justification existed with the First Appellate Authority to set aside the issue of financial expenses---Expenses were duly confronted through show-cause notices under S.62 of the Income Tax Ordinance, 1979 but the assessee did not respond---Disallowing the expenses claimed was fully justified as the assessee had been unable to justify the same---Rental income derived from the leasing of the assets being chargeable to tax under S.30 of the Income Tax Ordinance, 1979, Assessing Officer rightly disallowed the claim for lack of admissibility under S.31 of the Income Tax Ordinance, 1979---Appellate Tribunal vacated the order of the First Appellate Authority and restored that off Assessing Officer. (b) Income Tax Ordinance (XXXI of 1979)----- ----S.30---Income from other sources---Lease income---Income from lease of fixed assets comprising of land building and machinery for manufacture of poultry feed---Revising of lease agreement for the reason that lessor had failed to provide the lessee with an automatic feed manufacturing plant in working condition---Reduction in rent in spite of increase in fresh investment---Assessment was finalized on the basis of rent fixed by the original lease agreement on the ground that it was not provided anywhere in the original lease agreement that the agreement was subject to any pre-conditions such as the assurance regarding working condition of the new plant---Validity---Since the initial investment was substantially increased after the commencement of lease period, there was no justification for any reduction in lease rent---First Appellate Authority failed to examine the crucial fact that the original lease deed did not contain any stipulation requiring the lessor to install automatic feed production machinery---Very justification for a revision of monthly rent did not remain in field---First Appellate Authority failed to…

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